Ethics and Responsibility in The Wolf of Wall Street

This article discusses the ethical issues and responsibility portrayed in the movie The Wolf of Wall Street. It explores the impact of insider trading, bribery, and cheating on stakeholders. The article also suggests how the issue could have been dealt with using corporate social responsibility (CSR) and provides preventive measures for the future.

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Ethics and Responsibility

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Table of Contents
Introduction................................................................................................................................2
The ethical issue.........................................................................................................................3
Why it was unethical..................................................................................................................4
The stakeholders affected by the issue.......................................................................................4
How the issue was dealt with.....................................................................................................5
How they should have dealt with the issue using CSR..............................................................6
How the issue could be prevented in the future.........................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Introduction
The Wolf of Wall Street is a biographical comedy crime film which recounts
perspective of Belfort on his profession as a stockbroker in New York City and how his
enterprise Stratton Oakmont involved in rampant fraud and corruption on Wall Street that
finally steered it to demise. In this movie, Leonardo DiCaprio cast as Belfort, with his
business partner Johan Hill and friend Donnie Azoff. In the movie, he also has a second wife
named Margot Robbie and one FBI agent who attempts to take him down. Some of other
casts include Rob Reiner, McConaughey, Jean Dujardin, Joanna Lumley and Jon Favreau.
Stratton Oakmont is a national company serving all of area in the United States. The industry
from which it belongs relates to investment banking and stock trading.
Belfort gets employment in 1987 as a Wall Street trader where Mark Hanna, his
superior explains to him that how to create money for himself in light with the job of the
trader. Later on, Belfort found that his career was at the termination point and takes work at a
brokerage firm that does major operations as penny stocks. However, Jordan created a small
fortune with high commissions as well as hostile pitching.
As a stockbroker, Belfort must follow the professional culture to create money. He
has to choose between the dominant vices of making money or remain a responsible family
man. One of the major ethical issues showed in the film is insider trading. Another issue
includes bribery and cheating where he bribes people so that he could get out necessary
information from them and for them, he also offered huge rewards to FOX.
At the end of movie, the government apparent that Jordan deceived investors of with
$200 million dollars and so he was sent to prison for four years in conviction of securities
fraud and money laundering to which he only served 22 months. Moreover, Jordan also
argued to recompense an amount of $110 million to a victim compensation fund in a form of
restitution. In this report, is need to understand why what Belfort and the firm were pursuing
ethically wrong in light with various core philosophies of ethics such as Kantianism,
utilitarianism, and in last virtue theory. It also shows the implications over various
stakeholders such as employees, clients and management. In last, various preventive
measures are being presented so that people and organisation can undertake these in order to

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secure future investment in regards to sustainability. This will help various people to take out
necessary decisions in their relevant fields.
The ethical issue
Ethics are considered to be those values that reflect acceptable behaviour of an
individual to any specific situation. It can further be divided into individual morals and values
that is also based upon on the philosophy of what is wrong and what is right (Parboteeah et
al, 2010). In the same way, business values are known to be as collective values of corporates
that are appropriate and acceptable. These values help in development of trust between
departments, consumers and various other sorts of market participants. Such practise leads to
fair treatment in consideration with business practices.
In this movie, the lead actor Belfort break all ethical codes of practices. He became a
reckless deviant even once he had been belong to somewhat humble and family man. At the
beginning of the film, Jordan has a wife he loves most but later on, when his job as a broker
is disregarded, it feels let down. Considering all, there are various possible reasons for how
Jordan came into this situation.
In Belfort downfall, one of the key reason may be a mistake in his moral reasoning,
the procedure that is followed to help identify between unethical and ethical behaviour.
Laratta (2009) stated moral reasoning based on three stages that include – pre-conventional,
conventional and post-conventional. All these stages also include two levels. Stage one of
conventional reflects Behavior that needs to be punished due to its unacceptableness. It is
identified that Jordan, at certain point, reverted from an advanced stage to one and this may
be due to the meeting with Mark Hanna, a wealthy broker who apparently was pleased for
being a drug abuser, alcoholic as well as womanizer. Mark influenced Jordan significantly
and make opened new possibilities in front of him about the new world. This downfall also
possibly contribute in relation to ethical leadership theory of conduct. As per this theory, it
implies the individual behaviour and decision-making process that head up to the behaviour.
With meeting up with Mark, Jordan has perceived a whole new look at what is to be a leader.
It was found that he was explicitly showed a false image of a good leader and this is due to
the Hanna perception of wealth and power. Another possible cause of Jordan downfall is due
to Pump and Dump Scheme where the scene resembles Steve Madden.

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Why it was unethical
Through considering above theories, Jordan Belfort actions would be considered
unethical as the same deceitful individuals were distress from the destitution to which they
carried onto the people they were employed to assist. Various practices of Belfort and its
employee's will said to be unethical due to its impact on both investors and the market.
Belfort insider trading weakness the faith of investors and keep off people from investing
their capital.
The fiduciary association is one of the legal and moral obligations. Insider training is
shown in movie dispute the significance of fiduciary relationship. At the last, insider trading
also violates the duty of confidentiality or trust that one individual or corporate entity owes to
another. This leads to loss of confidence in the securities market. Moreover, in case of raising
new capital would be more difficult and costly for other organisations in the industry while
opportunities to undertake new project arise. This would potentially harm the economy as a
whole. Hence, those unethical practices showed in the movie also result in damage to the
market integrity and securities.
The stakeholders affected by the issue
In a business enterprise, a stakeholder is any individual, group or party that has an
interest in a corporation and the outcomes of its action. In reference with Stratton Oakmont,
the most significant stakeholder that would be affected are the clients as it is the obligation of
the company to recommend them into creating sound economic decisions about what stocks
to invest in so as to attain maximum ROI. However, they recommended individuals to invest
in the stocks that they knew the organisation had accrued shares and by buying those
recommended stocks the price of that stock would rise. Therefore, once the price was high
enough Belfort and his associates would sell the stock for a huge yield, leaving the
individuals they were supposed to benefit, out millions of dollars. The other stakeholders who
were getting affected would be the workers of the Stratton Oakmont who did profit and attain
happiness from the illegitimate actions of the corporation and were able to create a good deal
of money from the occupation they were pursuing. However, in the close, this pleasure that

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derived from the organisations left these individuals unemployed because of shutdown of
organisation and also as of certain criminal charges compelled against them. Moreover, these
employees in last also faced many legal crises in repayment of public money and investors. In
last, the ultimate stakeholders would be the Belfort and his associates who enjoyed an over-
the-top life from billions of illegal dollars or not these men were definitely happy. However,
many of them are in the government cell and paying back the money to the people from
whom they have snatched by being lying to them. So, in last, it can be said that it was
unethical behaviour of them that stimulate the clients to be unhappy from the reason they lost
million dollars to deceitful individuals. Currently, the same deceitful individuals are now
suffering from hardship and so by considering the theory, their behaviour was unethical and
the resulting outcome was also not positive.
How the issue was dealt with
In light of Kantianism theory, individuals having constant actions and think rationally
but at equally helping others with respect of different needs of people and taking out some
significant rational decisions. As per this theory, actions should be driven by goodwill and
what Jordan did with Stratton is totally against this theory as Belfort deceived and tricked the
people instead of benefitting people to invest their money. Taking out this irrational decision
contribute to the growth of the company however, it also destroys those people investment.
Jordan could have help out people to capitalise their cash into stocks that may bring higher
returns and taught his employees of more than 1000 staff to do the same but he did not.
In addition, to make the actions and behaviour ethical or unethical, there are four
characteristics in the virtue theory. It includes trust, courage, honesty and justice (Laratta,
2009). The actions of Jordan clearly states that he lacks courage due to his tricky behaviour
with the people and with making huge financial gains including wealth of various common
citizens. When considering trust and honesty, Jordan made his biggest ethical space by lying
to people about the business with saying that it will be beneficial for them if they invest in it
and thus takes most people money from the pocket who may be used that money in future as
for retirement, education of children or marriage. Considering justice as a characteristic, these
standings would be superior services, great concepts and rational practice. It is true that
Jordan does hard work at misleading people yet he did not try to work hard for benefitting the

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clients. He provides them with terrible services and advice which demolished certain
individual economically. It is the fact and the only justice that he must return back all of
amount of $110.4 million in full to all the people.
Hence, with fundamentals of beliefs, it is obvious that Jordan and the Stratton cannot
be called as an individual or firm that reveals the ethics of all the respective theories
mentioned above. Moreover, the firm is now out of business and does not maximise the
stakeholder profit. In last, all the employees of Belfort had used unfair practices to their
clients by not permitting to create sensible monetary choices in oppose of an ethical
organisation need to be run.
How they should have dealt with the issue using CSR
In 1960, the notion of business ethics was provoked as organisation became more
aware of increasing customer based communities in relating to the social cause, environment
and corporate responsibility (Bulutlar & Oz, 2009). It was beyond the right or wrong in
relation to business ethics. Managers in current corporate firms face complex and ambiguous
responsibilities from various contributory factors such as bosses, subordinates and other
stakeholders) who often create conflicting and diverse demands.
Considering corporate social responsibility, the important pillars includes community,
employees, environment and users. In relation to the movie and firm Stratton Oakmont, the
management can deal those ethical issues through various sustainable solutions. Taking
employee into the account, they should promote ethical policies and human rights so that
those more than 1000 employees may reject the path of Jordan to not use any sort of unfair
practices that are leading to loss of people money and trust. With encouragement of diversity,
their thought process can be developed and this fills the gap in their moral and ethical
behaviour. CSR policies are more emphasized towards society, it is necessary for them to act
ethically and ensure responsible selling by communication true information among the clients
and customers in light of ethical values and philosophy (Atabay, Cangarli & Penbek, 2015).
In this way, the issue can be prevented in relation with CSR practices.

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How the issue could be prevented in the future
After all the real tragedies in the film, Jordan had better directed his business drive by
creating actual and long-term value for both customer and himself. To prevent such issues in
future, following things can be done –
 Change management initiative - It plays an essential role when any company is
facing ethical issue. With the adoption of effective measures, it is possible to bring the
successful changes in the organization to some extent. Ethical issue is the serious
concern that requires the necessary action on the part of the company. In every
company, adoption of change management strategy is required at the time of risk and
decreasing growth.
 Recognise the ideal customer and specialise – It reflects the significance of
specialization. One needs to focus on client success as it directly equates to their
success. Having a short-sighted vision to create quick gains from the clients by not
considering their expectations will eventually lead to client loss. It is important for
managers and firms to understand that client is their biggest assets.
 What looks is not always great – Nothing can come into the place of value of real
knowledge and skills. It is important that one should not cover their shortcomings as a
well-dressed financial advisor may also be caught up while selling financial products.
 Check. Cross check. Repeat – Financial management nature is driven by expert
estimations but they are still largely peer-influenced (Brannmark & Sahlin, 2010). To
make accurate and sound financial decisions, it is important to check and evaluate
every aspect of the document and related concern.
 Have a solid process – Having a process and fine turning that intermittently is great
recipe to prevent such issues in the future. In engagement with rules and investors, it
is important to periodically evaluate the effectiveness of the process so as to identify
relevant gaps and linkage (O’Donohue & Nelson, 2009).

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Conclusion
The Wolf of Wall Street is one of the most popular films from recent history. Being a
biography, it has presented various questions related to ethical issues, its implications, stock
trading, insider trading, unethical ways, illegal activity and ultimately the collapse of an
entire organisation. In management terms, it demonstrates the ethical aspects of business in
relation to various theories and concepts.
In this picture, all ethical codes of practices were breached by the lead actor Belfort
break. Before he was a family man and now he became a thoughtless deviant. At the launch
of the film, Jordan has a spouse he loves most but far ahead, when his profession as a broker
is ignored, it finishes let down.
This report outlines all these significant aspects in respect with the character of Jordan
Belfort and the firm Stratton Oakmont. All the ethical issues, their impact on the
stakeholders, how government and individual deal with the issue, and some measures to help
in prevention in the future.

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References
Atabay, G., Çangarli, B. G., & Penbek, S. (2015). Impact of ethical climate on moral distress
revisited: multidimensional view. Nursing ethics, 22(1), 103-116.
Brannmark, J., & Sahlin, N. E. (2010). Ethical theory and the philosophy of risk: first
thoughts. Journal of Risk Research, 13(2), 149-161.
Bulutlar, F., & Oz, E. U. (2009). The effects of ethical climates on bullying behaviour in the
workplace. Journal of Business ethics, 86(3), 273-295.
Laratta, R. (2009). Ethical climate in nonprofit organizations: a comparative
study. International Journal of Sociology and Social Policy, 29(7/8), 358-371.
O’Donohue, W., & Nelson, L. (2009). The role of ethical values in an expanded
psychological contract. Journal of Business Ethics, 90(2), 251-263.
Parboteeah, K. P., Chen, H. C., Lin, Y. T., Chen, I. H., Lee, A. Y., & Chung, A. (2010).
Establishing organizational ethical climates: how do managerial practices
work?. Journal of business ethics, 97(4), 599-611.